SYDNEY, Nov 16 (Reuters) - Asian shares shed early gains on Friday after disappointing results from U.S. chipmaker Nvidia Corp hammered its stock and sent selling rippling through the entire tech sector.

The British pound also lay battered and bruised after a bout of political turmoil fanned fears the country could crash out of the European Union without a divorce deal.

Asian shares had started firm after hopes for a thaw in Sino-U.S. trade relations gave Wall Street a fillip, but a near 17 percent plunge in Nvidia’s stock soured the mood.

The chip designer on Thursday forecast disappointing sales for the holiday quarter, pinning the blame on unsold chips piling up with distributors and retailers after the evaporation of the cryptocurrency mining boom.

Also falling in after-hours trading were shares of Advanced Micro Devices and Intel.

“It started with Apple, then Nvidia... Since performances of these companies set the tone for the global tech and chip industries, related Japanese stocks will likely be sluggish for a while,” said Takatoshi Itoshima, a strategist at Pictet Asset Management.

POUND POUNDED

Sterling had stolen the limelight overnight after a rash of resignations rocked Prime Minister Theresa May’s government and threw into doubt her long-awaited Brexit agreement just hours after it was unveiled.

Fears that May’s hard-fought deal could collapse sent British markets into gyrations not seen since the June 2016 referendum on EU membership.

The pound suffered its biggest one-day loss against the euro since October 2016 and was last at 88.60 pence. Against the dollar, it was huddled at $1.2780 after shedding 1.6 percent overnight.

Joseph Capurso, a senior currency strategist at CBA, listed just some of sterling’s woes.

“If and when a vote on the withdrawal agreement occurs is uncertain. Whether the withdrawal bill is passed by both houses of Parliament is uncertain,” Capurso said in a note.

“Whether the Prime Minister resigns or is challenged for the leadership is uncertain. And, whether there is a second referendum and/or an election is uncertain.”

All of which helped British bonds rally sharply as investors wagered the political chaos and risk of a hard Brexit would deter the Bank of England from tightening anytime soon.

Yields on 5-year paper staged the largest one-day decline since the Brexit vote, at almost 15 basis points.

The plunge in sterling lifted the dollar against a basket of currencies to 96.976, even as the euro firmed a touch to $1.1333.

Also under water was the crypto currency Bitcoin, which hit a one-year trough overnight after tumbling 10 percent early in the week when support at $6,000 gave way. It was last changing hands at $5,575.53 on the Bitstamp platform.

In commodity markets, gold was up a shade at $1,214.30 .

Oil prices regained a little composure after their recent drubbing, helped by a decline in U.S. fuel stockpiles and the possibility of a cut in OPEC output.

U.S. crude was trading up 39 cents at $56.85, while Brent crude rose 48 cents to $67.10 a barrel.